Bernstein warns that a Senate failure to pass the CLARITY Act before the August recess could spark a short, sharp selloff in Bitcoin and altcoins. Polymarket now prices this year's passage at just 31%, down 9% in a month, as Bitcoin trades near $63,500.
Bernstein has warned that a Senate failure to advance the CLARITY Act before its August recess could trigger a swift, short-term selloff in Bitcoin and higher-risk altcoins. According to Bernstein, a stall would likely produce an "industry knee-jerk reaction", even as the bank still expects the crypto market to recover into the fourth quarter.
Odds Slide to 31% as Recess Looms
The Digital Asset Market Clarity Act passed the U.S. House 294-134 in July 2025, and the Senate Banking and Agriculture committees have since advanced their own versions. They merged those drafts into a 616-page text released on July 22, 2026. But the Senate is due to start its month-long recess around August 7-8, and prediction market Polymarket now puts this year's passage odds at just 31%, down 9% in the past month, as Democrats resist the new bill's language over ethics provisions tied to President Trump and his family's crypto interests.
Senate Majority Leader John Thune confirmed Monday that a procedural vote remains on his pre-recess list, though the bill is still absent from the official Senate floor schedule. Analysts note that if leadership waits until Wednesday to file cloture, the earliest a final floor vote could come is Friday.
Bernstein Still Expects a Q4 Rebound
Even without the bill, Bernstein expects the SEC and CFTC to accelerate rulemaking under Project Crypto, the joint initiative launched in July 2025. That effort would add clearer token taxonomy, DeFi and self-custody guidance, and a temporary innovation exemption from securities classification for new token issuances. Bitcoin is trading around $63,500-$64,000. That is about 50% below its October 2025 all-time high of $126,200. It remains down 27-30% year-to-date.
Weekly performance stays weak, with prices slipping 2-3% even as ETF inflows show signs of stabilizing despite negative year-to-date flows.
Industry Pressure Mounts Before Recess
Coinbase CEO Brian Armstrong and Grayscale have both pushed for an immediate Senate floor vote, while Treasury Secretary Scott Bessent has publicly urged lawmakers to act now. BlackRock, Fidelity, Goldman Sachs and the Fraternal Order of Police have backed the bill as the most consequential crypto market-structure legislation in U.S. history.
Analysts remain split on Bitcoin's outlook. Some see year-end 2026 targets ranging from $100,000 to $150,000. Others warn prices could fall toward $55,000-$60,000 if regulatory uncertainty persists.
Source: CoinGape
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